While it might seem counter-intuitive to borrow personal loans to improve credit scores, it can work in your favor if you use the money properly. A credit score is calculated based on five factors, each carrying a different weight. You can use this information to determine what you can afford and what types of loans might be best for you.
Car loans
Your credit score will be rebuilt if you make timely payments for your car loans. Paying late will only make your credit worse. You can find decent car loans that will help you rebuild your credit. Although it can be difficult to find an acceptable interest rate on a car loan for bad credit, it is possible to get one with a good credit rating and a history of making regular payments.
Low credit score applicants are likely to pay higher interest rates. Therefore, it is important to shop around for the best deal. Alternatively, you can postpone the purchase of a car until you have rebuilt your credit score and can qualify for a better rate.
Installment loans
Installment loans can help you improve your credit score. However, it is important to make payments on time. This loan reports to the credit bureaus each time you make a payment. This helps improve your credit score. Be aware that late payments may cause credit score to drop. If you can't make your monthly payments on time, you'll have to seek out an alternative source of credit.
Lenders will often require that you have a minimum credit score in order to approve an installment loan. These are because those with higher credit scores have a better chance to repay the loan. But, some lenders will consider your income annually when determining the interest rate.
Payday loans
Payday loans work well if you are in a pinch and need money quickly. Payday loans can come with a high interest rate, and they require repayment within two weeks. These loans are not for everyone. These items can actually end up costing you much more than you thought and can even cause credit damage.
A payday loan can be fast and easy to obtain, but it can be hard to repay. This loan is not recommended to have large monthly payments. Instead, choose an installment loan that requires fixed payments over a certain period of time. These loans can be used to lower monthly payments for those with bad credit.
Installment loans for co-signers
If you're rebuilding your credit and need money to pay for a home or car, you can find an installment loan with co-signers. You should remember that defaulting to an installment loan can lower your credit score. Lenders will be less likely to offer you the best terms because they view your credit history and risk. They may also take your collateral.
Fortunately, there are many alternatives to using a co-signer for an installment loan. Most people who need a loan will ask a close family member or friend to sign on it. This commitment can lead to long-term problems and could even endanger a relationship. That's why it is a good idea to learn more about other loan options.
Fairstone personal loans
If you have bad credit and need to rebuild your credit score, you may want to consider applying for a personal loan from Fairstone. They offer personal loans that are unsecured or secured. There are over 240 branches all across Canada. To determine if your loan eligibility, you can apply for a personal mortgage.
Even though the application process can take a while, it can be completed online or at Fairstone branches. You can also send your documents and information via email. Although the application process takes a while, it is significantly faster than that of other lenders. There are not many Fairstone personal loan reviews online, so it's hard to judge the company's customer service.